The risk premium used by households, companies and euro-zone governments to assess their investments is far too high

The euro zone has had a large external surplus since 2012, linked to weak investment by companies, households in housing and governments. However, the euro zone's savings surplus is invested in bonds from the rest of the world, particularly the United States, and the return on these bonds has been very low since 2012. This shows that economic agents in the euro zone, when assessing their investments, use a risk premium that is too high since they prefer to invest in bonds from the rest of the world rather than in the euro zone's real economy.